How to calculate a discount
Sale price = Original price × (1 − Discount % ÷ 100)
Amount saved = Original price − Sale price
An $80 item at 20% off → sale price = 80 × 0.80 = $64, you save $16.
Worked example: margin before and after the cut
A product listed at $80 with $32 cost starts at 60% margin: ($80 − $32) ÷ $80. Run a 25% off sale → sale price drops to $60. Margin after discount: ($60 − $32) ÷ $60 = 46.7% — still healthy. Now try 40% off → sale price $48, margin 33.3%. At 50% off the sale price is $40 and margin is only 20% — break-even ROAS jumps from 1.67x to 5x. Enter your cost above to see exactly where your promo crosses the danger line.
Don't discount blind — check margin
A 20% price cut can wipe out profit if margins are thin. Enter your cost to see profit margin after discount. If margin drops near zero, the promo only works if it lifts volume enough — you need roughly 2× the orders at half the margin just to match the same gross profit dollars. Check whether discounted AOV still supports your ROAS target before you scale promo traffic.
How discounts change your ROAS floor
Break-even ROAS = 1 ÷ gross margin. Every point of margin you give away raises the ROAS your ads must hit. A store running 3x ROAS at full price might need 4.5x on the same SKU during a deep sale — and most dashboards won't flag that automatically. Model post-discount margin here, then plug it into the target ROAS calculator before launching sale campaigns.
Common promo formats
- Percent off — what this calculator uses (20% off, 30% off).
- Fixed amount off — subtract a dollar amount; divide savings by original price to compare apples to apples.
- BOGO / bundles — often equivalent to ~25–50% off depending on structure; run the effective % through this tool.
Pair discounts with markup and profit margin planning so promos drive volume without training customers to never pay full price.